Africa Oil Corp. has raised its ownership in Block 3B/4B in South Africa’s Orange Basin to 18% from 17% after completing a deal with Eco (Atlantic) Oil & Gas Ltd.
Eco, based in Toronto, Canada, handed over a 1% stake to Africa Oil in exchange for the latter relinquishing its equity rights in Eco.
As part of the transaction, Africa Oil canceled over 54.94 million Eco common shares and more than 4.86 million warrants it previously held. Eco estimated the canceled shares were worth about CAD 11.5 million ($7.99 million), as stated in its own release on Monday.
The agreement, announced on July 29, 2024, was finalized between Eco subsidiary Azinam Ltd. and Africa Oil subsidiary Africa Oil SA Corp. (AOSAC).
Following the transaction, Eco retains a 5.25% share in Block 3B/4B, a South African portion of the Orange Basin, which is shared with Namibia, Botswana, and Lesotho.
Africa Oil’s CEO Roger Tucker highlighted that the transaction supports the company’s strategy to boost its stake in key assets, particularly in the Orange Basin, a region drawing significant industry interest.
Eco Atlantic’s CEO and co-founder, Gil Holzman, emphasized in Eco’s release that the deal enhances Eco’s per-share value and strengthens its balance sheet through a significant reduction in the company’s share count.
As a result of the transaction, Oliver Quinn, Africa Oil’s board representative at Eco, stepped down. Eco appointed a new non-executive director in his place.
Africa Oil expanded its stake after two major global energy firms farmed into the project.
On August 28, 2024, Africa Oil completed a deal with TotalEnergies SE, transferring operatorship of Block 3B/4B to the French energy giant for $10 million. The block is located near TotalEnergies’ DWOB block in the Orange Basin.
The agreement, involving 3B/4B co-venturer Ricocure (Pty.) Ltd., transferred 57% of the block to TotalEnergies and QatarEnergy. TotalEnergies secured 33%, QatarEnergy received 24%, and Ricocure, a South African entity, reduced its ownership from 53.75% to 19.75%.
On September 16, 2024, South Africa’s Mineral Resources and Energy Department approved an environmental permit for drilling up to five exploration wells in the block.
Block 3B/4B covers 17,581 square kilometers (6,788.06 square miles) with water depths ranging from 300 meters (984.25 feet) to 2,500 meters. Africa Oil reported the block contains approximately 14,000 km of 2D seismic data and 10,800 km² of 3D seismic data, revealing multiple exploration prospects, most located in about 1,500 meters of water.
The block is aligned with various oil discoveries, including the Venus find.
On February 24, 2022, TotalEnergies announced the Venus 1X oil discovery on the Namibian side of the Orange Basin. The drilling uncovered approximately 84 meters of net oil pay in a high-quality Lower Cretaceous reservoir, which the company described as “significant.”
